Mahendra Kumar Bajpai Vs Commissioner, Customs, Goods & Service Tax & Central Excise (CESTAT Allahabad)
Conclusion: Confiscation of eleven gold bars-MMTC marking/brand was upheld and penalty under section 112(b) was reduced to Rs. 2,50,000 as the reliability of statement of Mr. Bajpai recorded during investigation was doubtful, as he had alleged coercion and duress.
Held: Assessee was travelling from Kolkata to Kanpur by train. He was intercepted by the officers of Government Railway Police. On finding that he was carrying 13 pieces of gold bars, which appeared to be of foreign origin, he was detained. Police Officers thereafter called the Officers of Customs and handed over the foreign origin gold bars alongwith assessee to the Officers of Customs for further action at their end, under supurdaginama dated 30.01.2018. Before taking the possession of the gold bars from the GRP, Government approved valuer was called by the Officers of Customs who valued the gold weighing 12,993.30 gms. valued at Rs.3,98,89,431/-, as per his report dated 30.01.2018. Thereafter, the Customs Officers brought assessee to their office alongwith the gold for interrogation and for further investigation. Assessee did not produce any documents of sale/ purchase/ transportation with respect to the recovered gold. He further stated that as per his knowledge these gold bars had been brought to India from Bangladesh through off route by way of smuggling. Further, the gold bars were also bearing the marking normally affixed on the gold bars by the foreign manufacturers. Thus, it appeared to Officers of Customs that gold bars were brought into India from Bangladesh in violation of the provisions of Section 7(1)(c), 11 and 46 of the Customs Act, 1962 read with Section 123 of the Customs and read with Regulation 3(2&3) of Foreign Trade (Development and Regulation) Act, 1992 and also Rule 11 & 12 of the Foreign Trade (Regulation) Rules, 1993. Hence, detained goods appeared liable to confiscation under Section 111 of the Act. The Customs Officers seized the gold in question under Section 110 in the presence of two independent witnesses vide seizure order of even date. Further, two mobile phones – Oppo & Samsung and two bags were also recovered, as the two bags were used for carrying of gold, also appeared liable to be confiscated under Section 119 of the Customs Act. It was held that in view of foreign markings on 11 out of 13 gold bars seized, assessee failed to discharge the onus under Section 123. The allegation of smuggling through Bangladesh border was only presumption by Revenue, not established. Assessee remained in jail for about 18 months (From 1 February 2018 to July 2019). The order in original was passed on 29.3.2019, thus Mr. Bajpai did not have proper opportunity to defend himself. Two of the gold bars were of Indian Brand MMTC, total weight 1999.100 gms, valued at Rs. 61,37,237/-. Assessee was a person of small means, and was only a carrier. The reliability of statement of Mr. Bajpai recorded during investigation was doubtful, as he had alleged coercion and duress. The complicity of Mr. G. Agarwal was not established. Only evidence brought on record was the evidence of frequent calls (as per CDR) between assessee, and the statement of co-accused, which could not form the sole basis of imposing penalty. Mr. G. Agarwal had disowned the seized goods at the first instance, and also denied any connection of employer-employee or Principal – Agent with assessee. Nothing incriminating was found from Mr. G. Agarwal in the follow up search at his residence and business premises,” the CESTAT said. The Tribunal ruled that the penalty under Section 112(b) on assessee was reduced to Rs. 2,50,000, as he was only a carrier, and a person of small means.
FULL TEXT OF THE CESTAT ALLAHABAD ORDER
The appellants herein are in appeal against order-in-appeal passed by the Commissioner (Appeals), by which the absolute confiscation of seized 13 pieces of gold bars weighing 12,993.30 gms. valued at Rs.3,98,89,431/- have been confirmed, and further penalty imposed Rs.25,00,000/- under Section 112(b) of the Act on Shri Mahendra Kumar Bajpai and penalty of Rs. 12,00,000/- under Section 112(b) of the Act on Shri Girish Agrawal have been confirmed.
2. The brief facts of the case are that the appellant Shri Mahendra Kumar Bajpai was travelling from Kolkata to Kanpur by train. He was intercepted by the officers of Government Railway Police on 30.01.2018 at Mugal Sarai Jn. Railway Station. On finding that he was carrying 13 pieces of gold bars, which appeared to be of foreign origin, he was detained. The Police Officers thereafter called the Officers of Customs (P) Division, Varanasi to GRP Thana at Mugal Sarai and handed over the foreign origin gold bars alongwith Shri Mahendra Kumar Bajpai to the Officers of Customs for further action at their end, under supurdaginama dated 30.01.2018. Before taking the possession of the gold bars from the GRP, Government approved valuer was called by the Officers of Customs who valued the gold weighing 12,993.30 gms. valued at Rs.3,98,89,431/-, as per his report dated 30.01.2018. Thereafter, the Customs Officers brought Shri Mahendra Kumar Bajpai to their office alongwith the gold for interrogation and for further investigation. Shri Bajpai did not produce any documents of sale/ purchase/ transportation with respect to the recovered gold. He further stated that as per his knowledge these gold bars has been brought to India from Bangladesh through off route by way of smuggling. Further, the gold bars were also bearing the marking normally affixed on the gold bars by the foreign manufacturers. Thus, it appeared to Officers of Customs that gold bars were brought into India from Bangladesh in violation of the provisions of Section 7(1)(c), 11 and 46 of the Customs Act, 1962 read with Section 123 of the Customs and read with Regulation 3(2&3) of Foreign Trade (Development and Regulation) Act, 1992 and also Rule 11 & 12 of the Foreign Trade (Regulation) Rules, 1993. Hence, detained goods appeared liable to confiscation under Section 111 of the Act. The Customs Officers seized the gold in question under Section 110 vide panchnama dated 30/31.01.2018, in the presence of two independent witnesses vide seizure order of even date. Further, two mobile phones – Oppo & Samsung and two bags were also recovered, as the two bags were used for carrying of gold, also appeared liable to be confiscated under Section 119 of the Customs Act. The mobile phones were also seized for further investigation.
3. Statement of the appellant – Shri Mahendra Kumar Bajpai was recorded under Section 108 of the Customs Act wherein he agreed to the facts according to the panchnama and stated that he was carrying gold for and on behalf of Shri Girish Agrawal (other appellant) son of late Harishankar Agrawal, resident of 24/7 Birhana Road, Kanpur Nagar, who is the Proprietor of Kala Jagat Jewellers, Naughada, Naya Ganj, Kanpur. Further, he stated that he was working for Shri Girish Agrawal. He also stated that in the past also he has carried gold from Kolkata to Kanpur for Shri Girish Agrawal.
On each journey, he had carried Rs. 10 lakh, as given by Shri Girish Agrawal, which was delivered to the person at Kolkata and received the delivery of gold.
4. He further stated that his earlier journey to Kolkata was in 3rd week of December, 2017 alongwith Shri Girish Agrawal. Shri Girish Agrawal received six pieces of gold bars of foreign origin and delivered Rs.10 lakhs to the person who delivered, and they carried the gold bag to Kanpur.
5. On earlier occasion he gone to Kolkata in the first week of January, 2018 alone, and reached at the designated place near Jagannath ji Temple situated at Sonapatti, he contacted Shri Agrawal.
6. After waiting for some time a person met him who had also met him earlier and delivered him 8 pcs. gold bars of foreign origin and he gave Rs. 10 lakhs, as given by Sh. Agawal to the person who had given him the gold bars, and came back to Kanpur. For third time, he had gone to Kolkata, this time also he again reached near Jagannath Ji Temple, the same person met him and delivered 8 pieces of foreign origin gold bars and he delivered cash amount of Rs. 10 lakhs, which was received from Shri Girish Agrawal, and returned to Kanpur on 20.01.2018.
7. This time also he reached Kolkata on 29.01.2018 by Kalka Mail. Thereafter, he reached the designated spot at Jagannath Ji Temple and contacted Shri Girish Agrawal over his mobile No. 9336814496 from his mobile No. 9935327436. After waiting for some time an unknown person came to meet him. Shri Bajpai first gave him Rs. 10 rupee note, which had been given to him by Shri Agrawal, and then on confirming the said person gave him 12 pcs. of foreign origin gold bars, he gave Rs. 10 lakh cash, he was carrying. After receiving the gold he has started his journey from Kolkata by Hawrah Jodhpur Express for Kanpur. In the course of journey, he was intercepted at Mughalsarai railway station by the GRP, resulting in the present proceedings.
8. The details of the gold bars recovered from Shri Bajpai, as examined for valuation by Girdhar Gopal, Govt. Valuer, are as under:-
